Automated Summary
Key Facts
Barclays Bank of Uganda (applicant) applied to the court for the sale of mortgaged property (LRV 3547, Folio 2, Plot 4134, Masajja) due to default by respondents on a credit facility of shs. 160,000,000. The respondents, as mortgagor and principal debtor, failed to repay the principal and interest. The court ruled in favor of the bank, allowing the sale by private treaty to recover the debt, costs, and expenses. Vacant possession of the property was granted to the bank, and the wife of the mortgagor had consented to the mortgage (Annexture C). The respondents did not respond to summons, and their advocates withdrew, leading to substituted service via newspaper advertisement.
Transaction Type
Credit facility agreement secured by mortgage of land in Masajja.
Issues
- The Applicant requested permission to sell the mortgaged property via private treaty or public auction to recover the full amount owed, including costs and expenses. This was supported by Clause 8 (b) Paragraph 6 of the Mortgage Deed, which allows the bank to sell the property without further notice after default, with all associated costs charged to the mortgagor or principal debtor.
- The Applicant (mortgagee) sought to determine its entitlement under 0.37 r 4 C.P.R to foreclose and sell the mortgaged property (LRV 3547, Folio 2, Plot 4134, Masajja) to recover the principal debt of shs. 160,000,000/-, interest, and incidental charges. The legal basis included the mortgage deed's provisions allowing the bank to enforce remedies for default, as the Respondents had defaulted on payments and ignored demands.
- The Applicant asked the court to confirm its right to vacant possession of the mortgaged premises and to evict the First Respondent and his agents or anyone claiming under him. This followed unsuccessful service attempts on the Respondents and their absence at hearings, with substituted service via newspaper advertisement. The court considered the wife of the First Respondent's consent to the mortgage (Annexture C) and the lack of opposition from the Respondents.
Holdings
- The court affirmed the Applicant (Barclays Bank of Uganda) is entitled to foreclose and sell the mortgaged property (Plot 4134, Masajja) to recover the principal debt (UGX 160,000,000), interest, and incidental charges under CPR 0.37 r 4. The Respondents (Joshua Musimami and Mujowi Investments) defaulted on payments, and the mortgage deed explicitly allows the bank to enforce remedies without further notice.
- The Applicant is entitled to vacant possession of the mortgaged premises. The Respondents never responded to the summons, their advocates withdrew due to lack of instructions, and the First Respondent's wife (notified via mortgage consent in Annexture C) did not contest the sale. The court granted possession to facilitate the bank's sale process under CPR 0.9 r 1 (a).
- The court ruled the Applicant may sell the property by private treaty to recover the full sum due, including costs and expenses incurred during the sale process, as permitted under Clause 8 (b) Paragraph 6 of the Mortgage Deed. The Respondents failed to respond to service attempts, including newspaper advertisement in New Vision on 08.07.14.
Remedies
- The court determined that the Applicant is entitled to foreclose and sell the mortgaged property to recover the principal debt, interest, and other incidental charges. This was based on the mortgage deed and the default by the Respondents.
- The Applicant is allowed to sell the mortgaged property by private treaty to recover the entire sum due, including costs and expenses related to the sale.
- The Applicant is awarded the costs of the application.
- The Applicant is granted vacant possession of the mortgaged premises and is entitled to evict the First Respondent, his agents, or anyone claiming under him. The wife of the First Respondent consented to the mortgage, and there's no indication of her opposition.
Contract Value
160000000.00
Legal Principles
- The Applicant is entitled to sell the mortgaged property under CPR 0.37 r 4 to recover the debt.
- The court granted the Applicant the costs of the application.
Key Disputed Contract Clauses
- Clause 8 (b) Paragraph 5 of the mortgage deed provides that the bank's right to enforce remedies for default does not affect its ability to recover the principal debt, interest, and incidental charges. This clause was central to the Applicant's argument for its entitlement to foreclose and sell the property.
- Clause 8 (b) Paragraph 6 of the mortgage deed grants the bank the right to sell the mortgaged property by private treaty to recover the full amount due, including costs and expenses incurred during the sale process. These costs are charged to the mortgagor or principal debtor.
Cited Statute
Civil Procedure Rules
Judge Name
Flavia Senoga Anglin
Passage Text
- It is not disputed in this case that the Respondents defaulted in repayment of the principal sum and interest secured under the mortgage. The Applicant is therefore entitled to sell the mortgaged property.
- The all those reasons, all the issues raised in the originating summons are answered in the affirmative. Application is accordingly allowed.
- Under the above provisions, the bank as mortgagee is entitled to foreclose and sell the mortgaged property of the mortgagor to recover all the money due in respect of the principal debt, interest and other incidental charges.
Damages / Relief Type
- Entitled to vacant possession of mortgaged premises and evict respondents.
- Entitled to sell property by private treaty to recover UGX 160,000,000, interest, and costs/expenses related to the sale.
- Entitled to foreclose and sell mortgaged property to recover principal debt of UGX 160,000,000, interest, and incidental charges.
- Applicant awarded the costs of the application.